Germany and five other countries advocating for fiscal restraint have called for the proposed seven-year budget of the European Union amounting to 2 trillion euros (2.3 trillion dollars) to be reduced by “several hundred billion” euros. In their view, the budget should account for the budgetary consolidation process taking place in the bloc’s countries.
Chancellor Friedrich Merz met in Berlin with his counterparts from the Netherlands, Denmark, Austria, Finland, and Sweden to coordinate a common position. EU leaders aim to agree on the budget plan for 2028–2034 by the end of the year. The six countries called for the proposal to be reduced in a “balanced manner”.
This concerns the proposal presented by the European Commission last year. For it to take effect, it must be approved by the EU countries.
In a joint statement, the countries noted: “At a time when almost all member states are undergoing painful fiscal consolidation, the EU budget cannot be an exception. The European Union must make clear choices and review priorities in the budget, just as we do at the national level.”
Disputes over EU funding
The demand to reduce the budget came amid intensified negotiations among the 27 EU countries on the bloc’s future funding. Disputes are ongoing, particularly around spending on the Common Agricultural Policy and cohesion funds for poorer regions.
Germany rejected the Commission’s initial proposal of 2 trillion euros as “unacceptable” just a few hours after it was presented in July 2025.
Meanwhile, the European Commission abandoned the discount traditionally received by wealthier countries. This discount was meant to compensate states for the smaller amount of funds they receive from the EU budget. Denmark has again secured such a discount, causing discontent among other member states.
Allocation of funds and support for Ukraine
The proposed long-term EU budget framework includes nearly 900 billion euros for agriculture, over 400 billion euros for competitiveness and research, and another 130 billion euros for defense and security.
A separate fund of up to 100 billion euros is intended to help finance Ukraine’s military needs, according to Bloomberg.
“The multiannual financial framework will grow to meet our strategic priorities, but this can only happen at moderate rates,” the six countries stated. They emphasized that “cuts must affect all areas.”
President of the European Council António Costa is visiting EU countries this week, trying to assess the level of support for the proposed budget. Some states, including Spain and Italy, oppose its reduction.
Source: Bloomberg
